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Big retailers still struggling to crack the omni-channel challenge

Failure to meet the demands of providing an omnichannel customer experience is the single biggest internal business threat to the retail sector.

That’s what a recent industry study interviewing 400 of the world’s top retail CEOs suggested earlier this month. As if to compound and validate those fears, a few days later Sainsbury’s reported its first fall in profits for a decade – identifying a greater focus on providing a multichannel consumer experience as key to future growth.

In its report, Sainsbury’s highlighted plans to upgrade its website to improve the shopping experience, ensuring that customers have access to "a similar range of products online as they would in store".

The report also revealed the supermarket chain is developing technology to support seamless cross-channel shopping, and intends to roll out its click-and-collect grocery service around the UK, while also investing in innovations like mobile scan and go. Identifying customer loyalty as integral to success, the report indicated that Sainsbury's customers who shop across all of the retailer's channels spend over twice as much as those who only do their grocery shop in-store.

The challenge Sainsbury’s faces is a monumental call to arms for the wider retail industry. Digital has profoundly altered the consumer landscape, and the way that customers expect to connect, engage, communicate and make transactions with brands has fundamentally changed.

The fact that large brands are only just beginning to talk about embracing an omnichannel approach reveals the extent to which old-school business models have stubbornly held firm in boardrooms – but been left behind by consumers.

Consumers expect a unified, cohesive brand experience, regardless of context – of location or device they choose, online or in-person, desktop website, mobile website, or app. Same experience, same satisfaction, no matter what.

That’s what it means to provide a truly omnichannel experience. A basic starting point for all retailers is to understand that omnichannel and multichannel are not the same thing. Elizabeth Herrell, Vice President at Constellation Research, sums up the difference as follows:

Multichannel is an operational view – how you allow the customer to complete transactions in each channel. Omnichannel, however, is viewing the experience through the eyes of your customer, orchestrating the customer experience across all channels so that it is seamless, integrated and consistent… simply put, omnichannel is multichannel done right.

To get omnichannel right, brands need to appreciate and respond to the complexity of the new consumer landscape in which they now operate. Highly personalised experiences delivered across channels, with no corners cut on consistency or quality of customer service, is a crucial, brand-defining "here and now" need. That’s going to require a shift in internal mindset, skills and resources to embrace agile, iterative, test and learn approaches to product development, service delivery and communications.

Pizza chain Domino's is a prime example of a brand setting the bar for omnichannel best practice. CEO Patrick Doyle describes Domino's as more akin to a "tech company that sells pizza", pointing to its formidable 250-strong tech team, up from 50 ten years ago.

Having already released iPhone and Android apps with voice ordering functionality, Smartwatch apps, and a built-in quick-order system for Samsung Smart TVs, Domino's recently announced that its customers will soon be able to order by simply tweeting a pizza emoji to the firm's official Twitter account – a move that effectively redefines "fast food" for the millennial generation, and lays down the omnichannel gauntlet for retailers across all sectors.